Liquidated Damages and Stipulated Sums: You Don’t Know as Much as You Think

A live 90-minute CLE video webinar with interactive Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Thursday, February 17, 2022

1:00pm-2:30pm EST, 10:00am-11:30am PST

or call 1-800-926-7926

This CLE course will discuss a complex subject: enforcing or defeating a liquidated damages provision or one of its variations, such as stipulated sums, disincentives, lane closure charges, road user costs and reverse liquidated damages. The program will highlight why so many attorneys get these clauses wrong and why liquidated damages and stipulated sums are often held to be unenforceable.

Description

The mindset of too many attorneys when drafting liquidated damages provisions leads to expensive litigation problems. The attorneys may overestimate their understanding of how courts will interpret the provisions, misunderstand their intent, and exaggerate the scope of the freedom of contract.

Similarly, Counsel defending or challenging liquidated damages must thoroughly understand both prongs of the enforceability test and how to recognize penalties masquerading as liquidated damages. Cases reaching contradictory conclusions and anomalous holdings abound. They must also recognize that putting a liquidated damages clause in the contract will not excuse them from calculating actual damages at the time of the breach.

Prevalent in construction contracts and leases, stipulated sum provisions are increasingly showing up in employment agreements, noncompetes, M&A deals, managed care contracts, and other nontraditional areas. In deciding enforceability, courts must weigh whether they represent actual/potential damages or are they really a penalty that may not be enforceable.

Listen as this panel of litigators experienced in assessing, enforcing, and invalidating liquidated damages in various industries and sectors guides attorneys through the correct analysis and offers best litigation strategies.

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Outline

  1. Overview of hornbook law of liquidated damages
  2. Variations on liquidated damages
  3. Other contract provisions that could affect enforceability
  4. Burdens of proof and presumptions
  5. Loss or harm
    1. Uncertain
    2. Difficult to prove with certainty
  6. Amount
    1. In relation to anticipated damages
    2. In relation to actual damages
    3. Caused by the breach

Benefits

The panel will review these and other vital questions:

  • What happens if the liquidated damages far exceed or fail to approach actual damages?
  • Will liquidated damages be allowed when there are no actual damages?
  • Are optional liquidated damages clauses enforceable?
  • Can the non-breaching party be forced in discovery to provide actual damage amounts?
  • Who has the burden of proof on the issue of liquidated/stipulated damages?
  • What is the effect of termination of the contract on enforceability?
  • Is mitigation relevant for liquidated damages?

Faculty

McKenna, Michael
Michael F. McKenna

Partner
Cohen Seglias Pallas Greenhall & Furman

With more than 40 years of construction litigation experience, Mr. McKenna has been involved in some of the...  |  Read More

Additional faculty
to be announced.
Attend on February 17

Cannot Attend February 17?

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

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